Ey Apply Rev Disclosures Nov2019

Applying IFRS
Presentation and
disclosure requirements
of IFRS 15
Updated November 2019
Contents
1. Introduction and disclosure objective 3

2. What’s changed from legacy IFRS? 5
3. Presentation within the primary financial statements 7
3.1 Revenue from contracts with customers 7
3.2 Contract balances 10
3.3 Assets recognised from the costs to obtain or fulfil a
contract 15
3.4 Assets and liabilities arising from rights of return 17
3.5 Significant financing components 18
4. Disclosures within the notes to the financial statements 20
4.1 Disaggregation of revenue 20
4.2 Contract balances 26
4.3 Performance obligations 34
4.4 Significant judgements 50
contract 56
4.6 Practical expedients 59
5. Disclosures in interim financial statements 60
Appendix A: Extract from EY’s IFRS Disclosure Checklist 61
1 Updated November 2019 Applying IFRS Presentation and disclosure requirements of IFRS 15
What you need to know
• IFRS 15 provides a single source of revenue requirements for all entities in
all industries.
• IFRS 15 applies to revenue from contracts with customers. It became

effective in 2018 and replaced all of the legacy revenue standards and
interpretations in IFRS (legacy IFRS).
• The standard requires detailed disclosures to aid users in understanding

the nature, amount, timing and uncertainty of revenue and cash flows
arising from contracts with customers.
• Entities may have needed to adjust their processes, controls and systems
to capture the necessary data to meet the presentation and disclosure
requirements.
Updated November 2019 Applying IFRS Presentation and disclosure requirements of IFRS 15 2
1. Introduction and disclosure objective
The largely converged revenue standards, IFRS 15 Revenue from Contracts
with Customers and Accounting Standards Codification (ASC) 606, Revenue
from Contracts with Customers (together with IFRS 15, the standards), that
were issued in 2014 by the International Accounting Standards Board (IASB
or the Board) and the US Financial Accounting Standards Board (FASB)
(collectively, the Boards) provide accounting requirements for all revenue
arising from contracts with customers, unless the contracts are in the scope of
other IFRSs or US GAAP requirements, such as those for leases. The standards,
which superseded virtually all legacy revenue requirements in IFRS and US
GAAP, also specify the accounting for costs an entity incurs to obtain and fulfil
a contract to provide goods and services to customers and provide a model for
the measurement and recognition of gains and losses on the sale of certain non-
financial assets, such as property, plant or equipment.
In response to criticism that legacy revenue recognition disclosures were
inadequate, the Boards created a comprehensive and coherent set of
disclosures. The disclosure requirements affect all entities, even those that
had little change to the timing and amount of revenue recognised under the
standards on transition. This aspect of the standards presented a significant
challenge on transition that may continue to be challenging on an ongoing basis.
The objective of the disclosure requirements in the standards is to provide
“sufficient information to enable users of financial statements to understand
the nature, amount, timing and uncertainty of revenue and cash flows arising
from contracts with customers”. To achieve that objective, entities are required
to provide disclosures about their contracts with customers, the significant
judgements, and changes in those judgements, used in applying the standards
and assets arising from costs to obtain and fulfil its contracts.1
While an entity must provide sufficient information to meet the objective,
the disclosures described in the standards are not intended to be a checklist
of minimum requirements. That is, entities do not need to include disclosures
that are not relevant or are not material to them. In addition, an entity does
not need to disclose information in accordance with the revenue standards if
it discloses that information in accordance with another standard.
Entities are required to consider the level of detail necessary to satisfy the
disclosure objective and the degree of emphasis to place on each of the various
requirements. The level of aggregation or disaggregation of disclosures
requires judgement. Furthermore, entities are required to ensure that useful
information is not obscured (by either the inclusion of a large amount of
insignificant detail or the aggregation of items that have substantially different
characteristics).
1
IFRS 15.110.
How we see it
Entities should review their disclosures in each reporting period to determine
whether they have met the standard’s disclosure objective to enable users to
understand the nature, amount, timing and uncertainty of revenue and cash
flows arising from contracts with customers. For example, some entities
may make large payments to customers that do not represent payment for
a distinct good or service and, therefore, reduce the transaction price and
affect the amount and timing of revenue recognised. Although there are
no specific requirements in the standards to disclose balances related to
consideration paid or payable to a customer, an entity may need to disclose
qualitative and/or quantitative information about those arrangements to
meet the objective of the disclosure requirements if the amounts are
material.
This publication provides a summary of the presentation and disclosure

requirements in the IASB’s standard, IFRS 15, on an ongoing basis. It also
illustrates possible formats entities could use to disclose information required
by IFRS 15 using real-life and/or illustrative examples.
Extracts from financial statements presented in this publication are reproduced

for illustrative purposes. They have not been subject to any review on their
compliance with IFRS or any other requirements, such as local capital market
rules. This publication documents practices that entities have developed and
the extracts presented here are not intended to represent ’best practice’. We
also remind readers that the extracts presented should be read in conjunction
with the rest of the information provided in the financial statements in order to
understand their intended purpose.
This publication supplements our Applying IFRS, A closer look at IFRS 15, the
revenue recognition standard2 (general publication) and should be read in
conjunction with it.
While entities have adopted the standard, application issues may continue
to arise. Accordingly, the views we express in this publication may evolve as
additional issues are identified. The conclusions we describe in our illustrations
are also subject to change as views evolve. Conclusions in seemingly similar
situations may differ from those reached in the illustrations due to differences
in the underlying facts and circumstances.
Please see ey.com/IFRS for our most recent revenue publications.
2
The most up-to-date version of this publication is available at www.ey.com/IFRS.
2. What’s changed from legacy IFRS?
IFRS 15 provides explicit presentation and disclosure requirements that
are more detailed than under legacy IFRS and increase the volume of required
disclosures that entities have to include in their interim and annual financial
statements. Many of the requirements involve information that entities did
not disclose under legacy IFRS.
In practice, the nature and extent of changes to an entity’s financial statements
depended on a number of factors, including, but not limited to, the nature
of its revenue-generating activities and level of information it had previously
disclosed. Nevertheless, the following table summarises, at a high level, the
types of changes in disclosures when IFRS 15 was adopted. Please note that
this is not an exhaustive list.
IFRS 15 requirements Legacy disclosures Changes

Disaggregated revenue Revenue by segment • Further
(IFRS 15.114 – 115) and by significant disaggregation
category in accordance within segments
with IFRS 8 Operating
Segments • Disaggregation by
multiple categories
Contract balances Voluntary discussion • Additional
(IFRS 15.116 – 118) of significant work in quantitative
progress and deferred requirements for
revenue in the notes contract balances
or elsewhere
(e.g., Management • More prescriptive
Discussion & Analysis requirements for
(MD&A)) narrative discussion
• Applies to all
contract balances
Performance Voluntary discussion of • Disclosures for
obligations ‘backlog’ in the notes all unsatisfied
(IFRS 15.119 – 120) or elsewhere performance
(e.g., MD&A) obligations at
the reporting date
(when not applying
the practical
expedient)
• Only includes
amounts included
in the transaction
price
Significant judgements General requirements • Narrative
(IFRS 15.123 – 126) for disclosures of and quantitative
significant judgements disclosures about
in accordance with judgements used
IAS 1.122
when determining
timing and
measurement of
revenue recognition
IFRS 15 requirements Legacy disclosures Changes
Assets recognised from No explicit • Narrative
the costs to obtain or requirements and quantitative
fulfil a contract disclosures about
(IFRS 15.127 – 128) the balances and
amortisation
(including
impairment losses)
of contract costs
assets
Accounting policy Requirement to • No change to
disclosures disclose significant requirement, but
(IAS 1.117) accounting policies entities had to
reassess their
accounting policy
disclosures.
Not all of the presentation and disclosure requirements relevant to contracts

with customers are contained within IFRS 15. For example, entities still need to
comply with existing requirements in IAS 1 Presentation of Financial Statements
and IAS 34 Interim Financial Reporting.
As part of adoption of IFRS 15, entities also needed to reassess their accounting
policy disclosures in accordance with IAS 1.3 Under legacy IFRS, entities
provided brief and, sometimes, boilerplate disclosures of the policies in respect
of revenue recognition. The brevity may have been due, in part, to the limited
nature of the guidance provided in legacy revenue recognition requirements.
Given the complexity of the requirements in IFRS 15, the policies that apply to
revenues and costs within the scope of the standard are also more challenging
to explain and require entities to provide more tailored and detailed disclosures.
How we see it
IFRS 15 significantly increased the volume of disclosures required in entities’
financial statements, particularly annual financial statements.
Entities had to expend additional effort when initially preparing the required
disclosures for their interim and annual financial statements. For example,
some entities operating in multiple segments with many different product
lines may have found it challenging to gather the data needed to provide the
disclosures. We believe it is important for entities to have the appropriate
systems, internal controls, policies and procedures in place to collect and
disclose the required information on an ongoing basis. This will also enable
entities to re-evaluate their disclosures on an ongoing basis as their
circumstances change.
3
IAS 1.117.
3. Presentation within the primary financial
statements
3.1 Revenue from contracts with customers
Entities are required to present in the statement of comprehensive income, or
disclose within the notes, the amount of revenue recognised from contracts
with customers separately from other sources of revenue.4
IFRS 15 only applies to a subset of total revenue (i.e., revenue from contracts
with customers).5 IFRS 15 defines revenue as “Income arising in the course
of an entity’s ordinary activities”, but the standard excludes some revenue
contracts from its scope (e.g., leases).6 According to the 2010 Conceptual
Framework for Financial Reporting, revenue arises in the course of the ordinary
activities of an entity and is referred to by a variety of different names including
sales, fees, interest, dividends, royalties and rent”.7 IFRS 15 does not explicitly
require an entity to use the term ‘revenue from contracts with customers’.
Therefore, entities might use a different terminology in their financial
statements to describe revenue arising from transactions that are within
the scope of IFRS 15. However, entities should ensure the terms used are
not misleading and allow users to distinguish revenue from contracts with
customers from other sources of revenue.
Refer to section 4.1 of this publication for discussion on the requirement to

disclose disaggregated revenue.
Slater and Gordon Limited presented revenue from contracts with customers
that are within the scope of IFRS 15 in its consolidated statement of profit or
loss and other comprehensive income in the 2018 annual financial statements
separately from other income.
Practical example 3.1a: Slater and Gordon Limited (2018) Australia
4
IFRS 15.113(a).
5
IFRS 15.BC28
6
IFRS 15, Appendix A, and IFRS 15.5.
7
2010 Conceptual Framework for Financial Reporting, paragraph 4.29 (which applied when
IFRS 15 was issued). See paragraph BC4.96 of the 2018 Conceptual Framework for Financial
Reporting; when effective (for annual periods beginning of or after 1 January 2020), the 2018
Conceptual Framework for Financial Reporting will no longer contain a discussion about
revenue and gains and losses. However, the definition of revenue in IFRS 15 will remain
unchanged. The IASB does not expect the removal of that discussion to cause any changes in
practice.
In its 2018 annual financial statements, The Village Building Co. Limited
presented a combined revenue number on the face of the consolidated income
statement which includes revenue recognised from contracts with customers in
accordance with IFRS 15 and other revenue (e.g., rental income, dividends) in
the same line item. It then presented customer contract revenues separately
from other sources of revenue, in note 2.
Practical example 3.1b: The Village Building Co. Limited

Australia
(2018)
...
Ferrovial, S.A. has applied a different approach by disclosing the amounts
relating to contracts with customers in a narrative within the notes.
Practical example 3.1c: Ferrovial, S.A. (2018) Spain
Revenue within the scope of IFRS 15 may not be the main source of revenue
for some entities (e.g., banks and other financial entities). UBS Group AG
separately presented a line item for “Fee and commission income”, which is
within the scope of IFRS 15 and disclosed its disaggregation in note 4. Refer
to section 4.1 for further discussion of disclosure of disaggregated revenue.
Practical example 3.1d: UBS Group AG (2018) Switzerland
Practical example 3.1d: UBS Group AG (2018) (cont’d) Switzerland
Unless required, or permitted, by another standard, IAS 1 does not permit

offsetting of income and expenses within profit or loss or the statement of
comprehensive income.8
When applying the requirements for determining the transaction price in

IFRS 15, revenue recognised by an entity may include offsets, for example,
for any trade discounts given and volume rebates paid by the entity to its
customer. In the ordinary course of business, an entity may undertake other
transactions that do not generate revenue, but are incidental to the main
revenue-generating activities. When this presentation reflects the substance
of the transaction or other event, IAS 1 requires an entity to present “the
results of such transactions […] by netting any income with related expenses
arising on the same transaction”.9 An example given in IAS 1 is presenting
gains and losses on the disposal of non-current assets by deducting from the
amount of consideration on disposal, the carrying amount of the asset and
related selling expenses.10
3.2 Contract balances

The standard requires an entity to present the following items separately in
the statement of financial position:11
• Contract asset: An entity’s right to consideration in exchange for goods

or services that the entity has transferred to a customer
• Contract liability: An entity’s obligation to transfer goods or services to
a customer for which the entity has received consideration (or an amount
of consideration is due) from the customer
• Receivable: An entity’s right to consideration that is unconditional (only
the passage of time is required before payment of that consideration is
due).
8
IAS 1.32.
9
IAS 1.34.
10
IAS 1.34(a).
11
IFRS 15.105-107.
In its 2018 annual financial statements, Bombardier Inc. presented these
amounts separately using the terminology from the standard for contract
assets and liabilities.
Practical example 3.2a: Bombardier Inc. (2018) Canada
The standard allows an entity to use alternative descriptions in the statement

of financial position. However, an entity must disclose sufficient information
so that users of the financial statements can clearly distinguish between
unconditional rights to receive consideration (receivables) and conditional
rights to receive consideration (contract assets).12 In practical example 3.2b,
Ferrovial S.A. illustrated the use of such an approach, using alternative
terminology, but explaining, in its accounting policy note, how those terms
align with the terms used within the revenue standard. The entity also indicated
in which line item it has included these balances within the statement of
financial position (i.e., “Trade receivables for sales and services”). In note 4.2,
Ferrovial, S.A. disaggregated the line item presented in the statement of
financial position and disclosed contract assets (i.e., ”amounts to be billed
for work performed”) separately from its receivables.
12
IFRS 15.109.
Practical example 3.2b: Ferrovial, S.A. (2018) Spain
Entities are required to disclose impairment losses from contracts with
customers separately from other impairment losses, either in the statement of
comprehensive income or in the notes.13 Refer to section 10.1 of the general
publication for further discussion.
3.2.1 Current versus non-current presentation
Unless an entity presents its statement of financial position on a liquidity basis,
it needs to present assets or liabilities arising from contracts within the scope
of IFRS 15 as current or non-current in the statement of financial position.
IFRS 15 does not provide guidance on making this determination. Rather,
entities need to consider the requirements in IAS 1.
The distinction between current and non-current items depends on the length of
the entity's operating cycle. IAS 1 states that the operating cycle of an entity is
the time between the acquisition of assets for processing and their realisation
in cash or cash equivalents. However, when the entity's normal operating cycle
is not clearly identifiable, it is assumed to be 12 months.14 IAS 1 does not
provide guidance on how to determine whether an entity's operating cycle is
‘clearly identifiable’. For some entities, the time involved in producing goods or
providing services may vary significantly between contracts with one customer
to another. In such cases, it may be difficult to determine what the normal
operating cycle is. Therefore, management will need to consider all facts and
circumstances and use judgement to determine whether it is appropriate to
consider that the operating cycle is clearly identifiable, or whether to use the
twelve-month default.
In its 2018 annual financial statements, Fédération Internationale de Football

Association (FIFA) split contract liabilities between current and non-current in
its consolidated balance sheet and used the terms from the standard:
Practical example 3.2.1: Fédération Internationale de

Switzerland
Football Association (FIFA) (2018)
13
IFRS 15.107, 113(b).
14
IAS 1.68, 70.
3.2.2 Other presentation considerations
Contract assets and liabilities should be determined at the contract level and
not at the performance obligation level. As such, an entity would not separately
recognise an asset or liability for each performance obligation within a contract,
but would aggregate them into a single contract asset or liability.15 Contract
asset or contract liability positions are determined for each contract on a net
basis. This is because the rights and obligations in a contract with a customer
are interdependent – the right to receive consideration from a customer
depends on the entity’s performance and, similarly, the entity performs only
as long as the customer continues to pay.16 In practical example 4.2b, Airbus
SE mentioned in its accounting policies for contract balances that “net contract
assets and contract liabilities are determined for each contract separately”.
If an entity is required by IFRS 15 to combine contracts with the same customer

(or a related party of the customer), the contract assets or liabilities would be
combined (i.e., presented net). When two or more contracts are required to
be combined under the standard, the rights and obligations in the individual
contracts are interdependent.17 This may be operationally difficult for entities
if their systems are designed to capture data at the performance obligation
level in order to comply with the recognition and measurement aspects of
the standard.
Since IFRS 15 does not provide requirements for offsetting, entities will need
to apply the requirements of other standards (e.g., IAS 1, IAS 32 Financial
Instruments: Presentation) to determine whether it is appropriate to offset
contract assets and liabilities against other balance sheet items (e.g., accounts
receivable).18
Refer to Questions 10-1, 10-2 and 10-3 in section 10.1 of the general
publication for further discussion.
15
TRG Agenda paper no. 7, Presentation of a contract as a contract asset or a contract liability,
dated 31 October 2014.
16
IFRS 15.BC317.
17
18
3.3 Assets recognised from the costs to obtain or fulfil
a contract
If an entity recognises incremental costs of obtaining the contract and/or costs
to fulfil a contract as assets in accordance with the requirements in IFRS 15,
the standard requires that such assets are presented separately from contract
assets and contract liabilities in the statement of financial position or disclosed
separately in the notes to the financial statements.19
The standard is silent on the classification of contract cost assets and the
related amortisation. Therefore, entities will need to develop an appropriate
accounting policy. In doing so, we believe that costs to obtain a contract and
costs to fulfil a contract need to be considered separately for the purpose of
presentation in financial statements.
Considering the nature of costs to obtain a contract and the lack of guidance
in IFRS, we believe an entity may choose to present these costs as either:
• A separate class of asset (similar in nature to work in progress, or

‘inventory’) in the statement of financial position and its amortisation
within cost of goods sold, changes in contract costs or similar
Or
• A separate class of intangible assets in the statement of financial position
and its amortisation in the same line item as amortisation of intangible
assets within the scope of IAS 38 Intangible Assets
In addition, the entity needs to consider the requirements in IAS 7 Statement
of Cash Flows, in particular IAS 7.16(a), when determining the classification
of cash flows arising from costs to obtain a contract, i.e., either as cash flows
from operating activities or financing activities.
In contrast, the nature of costs to fulfil a contract is such that they directly
affect the entity’s performance under the contract. Therefore, costs to fulfil
a contract should be presented as a separate class of asset in the statement
of financial position and its amortisation within cost of goods sold, changes in
contract costs or similar.
Whether costs to fulfil a contract meet the criteria for capitalisation in

IFRS 15.95 or are expensed as incurred, we believe that presentation of such
costs in the statement of profit and loss and other comprehensive income and
the presentation of related cash flows in the statement of cash flows needs to
be consistent.
Capitalised contract costs are subject to an impairment assessment at the end

of each reporting period. Impairment losses are recognised in profit or loss,
but the standard is silent on where to present such amounts within the primary
financial statements. We believe it would be appropriate for the presentation
of any impairment losses to be consistent with the presentation of the
amortisation expense.
19
IFRS 15.116(a).
Capita plc presented capitalised costs to fulfil a contract as a separate class
of asset in its consolidated balance sheet. The portion relating to contracts
for which performance obligations are expected to be satisfied within
12 months from the end of the reporting period is classified as current. As
disclosed in note 2, “Summary of significant accounting policies” (see practical
example 4.5), Capita plc presented the amortisation of capitalised costs to fulfil,
as well as any impairment losses, within cost of sales.
Practical example 3.3: Capita plc (2018) United Kingdom
Refer to section 4.5 of this publication for disclosure requirements for such
assets, and section 9 of the general publication for further discussion on
contract costs.
3.4 Assets and liabilities arising from rights of return
An entity may recognise refund liabilities and an asset for the right to recover
products on settling that liability. The standard requires an entity to present
the refund liability separately from the corresponding asset (i.e., on a gross
basis, rather than a net basis).20 While the standard does not explicitly state
this, we believe that the return asset would generally be presented separately
from inventory.
Refer to section 5.4 of the general publication for further discussion.
Salvatore Ferragamo presented refund liabilities and right of return assets

as separate line items in its consolidated statement of financial position. The
related accounting policies were disclosed in note 2 of the consolidated financial
statements.
Practical example 3.4: Salvatore Ferragamo S.p.A. (2018) Italy
20
IFRS 15.B25.
3.5 Significant financing components
When a significant financing component exists in a contract, there are two
components: a revenue component (for the notional cash sales price);
and a significant financing component (for the effect of the deferred or
advance payment terms).21 The amount allocated to the significant financing
component is presented separately from revenue recognised from contracts
with customers. The financing component is presented as interest expense
(when the customer pays in advance) or interest income (when the customer
pays in arrears).22 The IASB noted in the Basis for Conclusions that an entity
presents interest income as revenue only when it represents income from an
entity’s ordinary activities.23
In its 2018 annual financial statements, Bombardier Inc. presented the

financing component arising from customers’ advance payments separately
from revenue and included it as part of financing expense.
Practical example 3.5a: Bombardier Inc. (2018) Canada
Although there are two components within the transaction price when there
is a significant financing component (i.e., the revenue component and the
significant financing component), it is only in the case of deferred payment
terms that there are two cash flow components. In that case, the revenue
component cash flows should be classified as cash flows from operating
activities, and the cash flows related to the significant financing component
should be classified consistent with the entity’s choice to present cash flows
from interests received/paid in accordance with IAS 7.33 (i.e., as cash flows
from operating or investing/financing activities). If the customer pays in
advance, the sum of the cash amount and the accrued interest represent
revenue, and thus there is only one cash flow component. Accordingly,
the cash received should be classified as cash flows from operating activities.
21
IFRS 15.BC244.
22
IFRS 15.65.
23
IFRS 15.BC247.
Impairment losses on receivables, with or without a significant financing
component, are presented in line with the requirements of IAS 1 and disclosed
in accordance with IFRS 7 Financial Instruments: Disclosures. However,
as discussed in section 3.2, IFRS 15 makes it clear that such amounts are
disclosed separately from impairment losses from other contracts.24 Refer
to section 5.5.2 of the general publication for further discussion.
Bombardier Inc. provided disclosure of impairment losses recognised on its

contracts with customers in note 18.
Practical example 3.5b: Bombardier Inc. (2018) Canada
How we see it
We believe entities may need to expend additional effort to track impairment
losses on assets arising from contracts that are within the scope of IFRS 15
separately from impairment losses on assets arising from other contracts.
Entities need to ensure that they have the appropriate systems, internal
controls, policies and procedures in place to collect and separately present
this information.
24
IFRS 15.113(b).
4. Disclosures within the notes to the financial
statements
4.1 Disaggregation of revenue
The standard includes the following disclosure requirements in relation to the
disaggregation of revenue:
Disclosure requirements IFRS 15

Quantitative • Disaggregated revenue by categories IFRS 15.114
that depict how the nature, amount,
timing and uncertainty of revenue and
cash flows are affected by economic
factors
• If the entity applies IFRS 8 Operating IFRS 15.115
Segments, an entity must disclose
sufficient information to enable users of
financial statements to understand the
relationship between the disclosure of
disaggregated revenue and revenue
information that is disclosed for each
reportable segment
While the standard does not specify precisely how revenue should be
disaggregated, the application guidance indicates that the most appropriate
categories for a particular entity will depend on its facts and circumstances.25
When selecting a category to use to disaggregate revenue, entities should
consider how revenue is disaggregated for other purposes, including:
• How it discloses revenue in other communications (e.g., press releases,
other public filings)
• How information is regularly reviewed by the chief operating decision maker
to evaluate the financial performance of operating segments (in accordance
with IFRS 8)
• How other information is used by the entity, or users of the financial
statements, to evaluate financial performance or make resource allocation
decisions
In addition, entities need to make this determination based on entity-specific
and/or industry-specific factors that would be most meaningful for their
businesses.
25
IFRS 15.B88.
Examples of categories might include, but are not limited, to the following26
(also refer to section 10.5.1 of the general publication):
Category Example
Type of good or service Major product lines
Geographical region Country or region
Market or type of customer Government and non-government
customers
Contract duration Short-term and long-term contracts
Timing of transfer of goods or Goods or services transferred to
services customers:
• At a point in time
• Over time
Sales channels Goods sold:
• Directly to consumers
• Through intermediaries
We believe that, when determining categories for disaggregation of revenue,

entities need to analyse specific risk factors for each of their revenue streams
to determine the appropriate level of revenue disaggregation that will be
beneficial to users of the financial statements. If certain risk factors could
lead to changes in the nature, amount, timing and uncertainty of revenue
recognition and cash flows, those factors will need to be considered as part
of the evaluation.
IFRS 15 provides the following example to illustrate how an entity might

disclose its disaggregated revenue:
Extract from IFRS 15

Example 41 — Disaggregation of revenue—quantitative disclosure
(IFRS 15.IE210-IE211)
An entity reports the following segments: consumer products, transportation
and energy, in accordance with IFRS 8 Operating Segments. When the entity
prepares its investor presentations, it disaggregates revenue into primary
geographical markets, major product lines and timing of revenue recognition
(ie goods transferred at a point in time or services transferred over time).
The entity determines that the categories used in the investor presentations
can be used to meet the objective of the disaggregation disclosure
requirement in paragraph 114 of IFRS 15, which is to disaggregate revenue
from contracts with customers into categories that depict how the nature,
amount, timing and uncertainty of revenue and cash flows are affected by
economic factors. The following table illustrates the disaggregation disclosure
by primary geographical market, major product line and timing of revenue
recognition, including a reconciliation of how the disaggregated revenue
ties in with the consumer products, transportation and energy segments,
in accordance with paragraph 115 of IFRS 15.
26
IFRS 15.B89.
Extract from IFRS 15 (cont’d)
Consumer
Segments products Transport Energy Total
CU CU CU CU
Primary geographical markets
North America 990 2,250 5,250 8,490
Europe 300 750 1,000 2,050
Asia 700 260 - 960
1,990 3,260 6,250 11,500
Major goods/service lines

Office Supplies 600 - - 600
Appliances 990 - - 990
Clothing 400 - - 400
Motorcycles - 500 - 500
Automobiles - 2,760 - 2,760
Solar Panels - - 1,000 1,000
Power Plant - - 5,250 5,250
1,990 3,260 6,250 11,500
Timing of revenue recognition

Goods
transferred at a
point in time 1,990 3,260 1,000 6,250
Services
transferred over
time - - 5,250 5,250
1,990 3,260 6,250 11,500
Since entities are encouraged to tailor their disclosure of disaggregated

revenue, they are unlikely to follow a single approach.
Consistent with the approach illustrated in the Extract from IFRS 15 above,
some entities provided disaggregated revenue information within their segment
reporting disclosure. As shown in practical example 4.1a, Capita plc disclosed
both revenue by major product line and segment revenue by contract type
in its segment note (note 6) within its 2018 annual financial statements. In
the summary of significant accounting policies, it specifically stated that this
approach is consistent with the objective of the disclosure requirement and
explained the differences in the terminology used in previous financial
statements.
The segment revenue disclosures provided in accordance with IFRS 8 might be

based on non-GAAP information (i.e., the revenue that is reported to the chief
operating decision maker may be calculated on a basis that is not in accordance
with IFRS 15). In such a situation, an entity may need to disclose additional
information to meet the objective in IFRS 15.114.27
27
IFRS 15.BC340
Practical example 4.1a: Capita plc (2017) United Kingdom
SNCF Mobilités disclosed disaggregated revenue by main types of services

provided, by type of customer, and by timing of transfer of services in
the revenue note (note 3.2) in its 2018 annual financial statements. The
disaggregated revenue table in practical example 4.1b included a column
for SNCF Mobilités’ reportable segments and the amount of total revenue
was reconciled with the total revenue disclosed in the segment note. This is
important because it helps users to understand the relationship between the
disclosure of disaggregated revenue in the revenue note and the revenue
information that is disclosed for each reportable segment in the segment note.
Practical example 4.1b: SNCF Mobilités (2018) France
Slater and Gordon Limited included segment disclosures in note 2, but also
separately disclosed disaggregated revenue by major product line within its
segment note and type of contract in the revenue note (note 3.1) in its 2017
annual financial statements:
Practical example 4.1c: Slater and Gordon Limited (2017) Australia
In its 2018 financial statements, FIFA split its disclosure of disaggregated

revenue between the primary financial statements and the notes. In
the statement of comprehensive income, FIFA presented revenue on
a disaggregated basis, by the type of service. In the notes, FIFA further
disaggregated each type of revenue into different categories, depending
on the nature of the revenue. For example, in note 1, FIFA disaggregated
“Revenue from television broadcasting rights” by geographical region, while
presenting “Revenue from marketing rights” by type of customer. Since FIFA
does not need to comply with IFRS 8, the requirements in IFRS 15.115 do not
apply.
Practical example 4.1d: Fédération Internationale de
Switzerland
Football Association (FIFA) (2018)
How we see it
In accordance with IFRS 15.B88, an entity needs to consider how
information about its revenue has been presented for other purposes,
including information disclosed outside the financial statements, information
regularly reviewed by the chief operating decision maker and other similar
information used by the entity or users of the financial statements to
evaluate the entity’s financial performance or to make resource allocation
decisions.
As discussed above, to help determine the appropriate level of revenue

disaggregation that is beneficial to users of the financial statements, entities
should analyse specific risk factors for each revenue stream. Different risk
factors for revenue streams may indicate when disaggregation is required.
4.2 Contract balances
The standard includes the following disclosure requirements for an entity’s
contract balances and changes in the balances (refer to section 10.5.1 of
the general publication for further discussion):

Quantitative • The opening and closing balances IFRS 15.116(a)
of receivables, contract assets and
contract liabilities from contracts with
customers, if not otherwise separately
presented or disclosed
• Revenue recognised in the reporting IFRS 15.116(b)
period that was included in the contract
liability balance at the beginning of
the period
• Revenue recognised in the reporting IFRS 15.116(c)
period from performance obligations
satisfied (or partially satisfied) in
previous periods (for example, changes
in transaction price)
Qualitative • Explanation of how the timing of IFRS 15.117
satisfaction of its performance
obligations relates to the typical timing
of payment and the effect that those
factors have on the contract asset and
contract liability balances
Quantitative • Explanation of the significant changes IFRS 15.118
or qualitative in the contract asset and the contract
liability balances during the reporting
period, for example:
• Changes due to business
combinations
• Cumulative catch-up adjustments

to revenue that affect the
corresponding contract asset
or contract liability (including
adjustments arising from a change
in the measure of progress,
a change in an estimate of the
transaction price) or a contract
modification
Disclosure requirements IFRS 15 (cont’d)
Quantitative • Impairment of a contract asset IFRS 15.118
or qualitative
• A change in the time frame for a
right to consideration to become
unconditional (i.e., for a contract
asset to be reclassified to a
receivable)
• A change in the time frame for

a performance obligation to be
satisfied (i.e., for the recognition
of revenue arising from a contract
liability)
How we see it
Disclosing contract assets and liabilities and the revenue recognised from
changes in contract liabilities and performance obligations satisfied in
previous periods was a change in practice for most entities on adoption of
IFRS 15. IFRS 15.116(a) requires entities to separately disclose contract
balances from contracts with customers. Therefore, it is necessary for
entities that have material receivables from non-IFRS 15 contracts to
separate these balances for disclosure purposes. For example, an entity
may have accounts receivable related to leasing contracts that would need
to be disclosed separately from accounts receivable related to contracts with
customers.
Entities need to make sure they have appropriate systems, policies and
procedures and internal controls in place to collect and disclose the required
information. For example, consider a sales-based or usage-based royalty
received by the entity in reporting periods after it delivers a right-to-use
licence of intellectual property. In this example, the royalties relate to a
previously satisfied performance obligation, but are revenue that the entity
receives in subsequent periods. As such, they would be disclosed separately
in accordance with IFRS 15.116(c).
The illustration below is an example of how an entity may fulfil these
requirements by using a combination of tabular and narrative formats:
Illustration 4.2 — Contract asset and liability disclosures

Company A presents receivables from contracts with customers separately
in the statement of financial position. To comply with the other disclosures
requirements for contract assets and liabilities, Company A includes the
following information in the notes to the financial statements:
20X9 20X8 20X7
Contract asset CU1,500 CU2,250 CU1,800

Contract liability CU(200) CU(850) CU(500)
Revenue recognised in the period from:

Amounts included in CU650 CU200 CU100
contract liability at the
beginning of the period
Performance obligations CU200 CU125 CU200
satisfied in previous
periods
We receive payments from customers based on a billing schedule, as
established in our contracts. Contract asset relates to our conditional
right to consideration for our completed performance under the contract.
Accounts receivable are recognised when the right to consideration becomes
unconditional. Contract liability relates to payments received in advance
of performance under the contract. Contract liabilities are recognised as
revenue as (or when) we perform under the contract. In addition, contract
asset decreased in 20X9 due to a contract asset impairment of CU400
relating to the early cancellation of a contract with a customer.
In its significant accounting policies disclosure, Deutsche Telekom
Aktiengesellschaft disclosed how the timing of satisfaction of its performance
obligation relates to the typical timing of payment and the effect those factors
have on the contract asset and contract liability balances.
Practical example 4.2a: Deutsche Telekom

Germany
Aktiengesellschaft (2018)
Practical example 4.2a: Deutsche Telekom
Germany
Aktiengesellschaft (2018) (cont’d)
Before providing its disclosure of significant changes in contract balances,
Airbus SE provided the accounting policies for its contract balances in practical
example 4.2b below. It then disclosed, in a table, the significant changes in the
contract asset and the contract liability balances during the reporting period.
The opening and closing balances are included in the primary financial
statements.
Practical example 4.2b: Airbus SE (2018) Netherlands
ProSiebenSat.1 Media SE explained the nature of its contract assets and
contract liabilities in practical example 4.2c. In note 5, it disclosed the opening
and closing balances of contract assets and contract liabilities in a table. Below
the table, it explained the significant changes in the contract asset and contract
liability balances during the reporting period using a narrative format. In the
same note, ProSiebenSat.1 Media SE disclosed the revenue recognised that
was included in the contract liability balance at the beginning of the period.
Practical example 4.2c: ProSiebenSat.1 Media SE (2018) Germany
As shown in the following practical example 4.2d, ASML Holding N.V. included
a roll-forward of contract assets and contract liabilities to disclose significant
changes in the balances during the reporting period. Although such a roll-
forward is not required under IFRS 15, it may be an effective way to provide
the disclosures required by IFRS 15.118. The requirement of the standard to
disclose the “revenue recognised in the reporting period that was included in
the contract liability balance at the beginning of the period” was incorporated
in the roll-forward. In addition, ASML Holding N.V. also provided a narrative
explanation of the significant changes in the net contract balances during the
reporting period.
Practical example 4.2d: ASML Holding N.V. (2018) Netherlands
4.3 Performance obligations
4.3.1 Information about performance obligations
IFRS 15 requires an entity to disclose the following qualitative information
about its performance obligations (refer to section 10.4.1 of the general
publication for further discussion):

Qualitative • Information about performance
obligations in contracts with customer,
including a description of the following:
• When the entity typically satisfies IFRS 15.119(a)
its performance obligations (for
example, upon shipment, upon
delivery, as services are rendered
or upon completion of service)
including when performance
obligations are satisfied in a bill-
and-hold arrangement
• Significant payment terms (for IFRS 15.119(b)

example, when payment is typically
due, whether the contract has
a significant financing component,
whether the consideration amount
is variable and whether the
estimate of variable consideration
is typically constrained)
• The nature of the goods or services IFRS 15.119(c)

that the entity has promised
to transfer, highlighting any
performance obligations to arrange
for another party to transfer goods
or services (i.e., if the entity is
acting as an agent)
• Obligations for returns, refunds IFRS 15.119(d)

and other similar obligations
• Types of warranties and related IFRS 15.119(e)

obligations
Aluminum Corporation of China Limited provided summarised qualitative
information about its performance obligations in note 4 of its 2018 annual
financial statements. In the same note, it provided quantitative information
about its remaining performance obligations. Refer to section 4.3.2 for further
discussion of transaction price allocated to remaining performance obligations.
Practical example 4.3.1a: Aluminum Corporation of China

China
Limited (2018)
Spotify Technology S.A. highlighted in its revenue note that the disclosures
of its performance obligations are included in its significant accounting
policy disclosures. In its summary of significant accounting policies, Spotify
Technology S.A. disclosed information about its performance obligations for
subscription and advertising services. It described when it typically satisfies
its performance obligations and the significant payment terms.
Practical example 4.3.1b: Spotify Technology S.A. (2018) Sweden
In the summary of significant accounting policies, UBS Group disclosed
its performance obligations within the scope of IFRS 15. It divided those
performance obligations between those that are ‘satisfied over time’ and
those that are ‘satisfied at a point in time’.
Practical example 4.3.1c: UBS Group AG (2018) Switzerland
Practical example 4.3.1c: UBS Group AG (2018) (cont’d) Switzerland
As part of its disclosure of information about its performance obligations, as

presented in practical example 4.3.1d below, Koninklijke Philips N.V. provided
information about the nature of its goods and services (e.g., consumer type-
products, brand and technology licences), the timing of satisfaction of their
performance obligations and the significant payment terms. It also provided
information about the existence of sales returns and assurance-type warranties.
In its 2018 annual financial statements, ASML Holding N.V. provided a table
that includes information about its performance obligations as shown in
practical example 4.3.1e below. The first column provided details of the various
performance obligations. The second column provided information about the
nature and satisfaction of these performance obligations and details of payment
terms.
Practical example 4.3.1d: Koninklijke Philips N.V. (2018) Netherlands
Practical example 4.3.1d: Koninklijke Philips N.V. (2018) (cont’d) Netherlands
Practical example 4.3.1e: ASML Holding N.V. (2018) Netherlands
Practical example 4.3.1e: ASML Holding N.V. (2018) (cont’d) Netherlands
Practical example 4.3.1e: ASML Holding N.V. (2018) (cont’d) Netherlands
4.3.2 Transaction price allocated to remaining performance obligations
IFRS 15 also requires an entity to provide information about unsatisfied or
partially satisfied performance obligations, as follows (refer to section 10.5.1
of the general publication for further discussion):

Quantitative • The aggregate amount of the IFRS 15.120(a)
transaction price allocated to the
performance obligations that are
unsatisfied (or partially unsatisfied)
as of the end of the reporting period
Quantitative • An explanation of when the entity IFRS 15.120(b)
or expects to recognise this amount as
qualitative revenue, using either:
• Quantitative information (i.e., using
time bands that would be most
appropriate for the duration of the
remaining performance obligations)
Or
• Qualitative information
Practical An entity needs not to disclose information IFRS 15.121

expedient about the aggregate amount of the
transaction price allocated to the
performance obligations that are
unsatisfied, when either of the following
conditions is met:
• The original expected duration of the
underlying contract is one year or less
• The entity recognises revenue from
the satisfaction of the performance
obligation in accordance with
IFRS 15.B16.
That paragraph permits, as a practical
expedient, that if an entity has a right
to consideration from a customer in an
amount that corresponds directly with
the value to the customer of the entity's
performance completed to date (for
example, a service contract in which an
entity bills a fixed amount for each hour
of service provided), the entity may
recognise revenue in the amount to
which the entity has a right to invoice
Disclosure requirements IFRS 15 (cont’d)
Qualitative • An entity must explain qualitatively IFRS 15.122
whether it is applying the practical
expedient in IFRS 15.121 and whether
any consideration from contracts
with customers is not included in the
transaction price and, therefore, not
included in the information disclosed
in accordance with IFRS 15.120. For
example, an estimate of the transaction
price would not include any estimated
amounts of variable consideration that
are constrained
The standard provides the following examples of these required disclosures:

Example 42 — Disclosure of the transaction price allocated to the
remaining performance obligations (IFRS 15.IE212-IE219)
On 30 June 20X7, an entity enters into three contracts (Contracts A, B
and C) with separate customers to provide services. Each contract has
a two-year non-cancellable term. The entity considers the requirements
in paragraphs 120–122 of IFRS 15 in determining the information in each
contract to be included in the disclosure of the transaction price allocated
to the remaining performance obligations at 31 December 20X7.
Contract A
Cleaning services are to be provided over the next two years typically at
least once per month. For services provided, the customer pays an hourly
rate of CU25.
Because the entity bills a fixed amount for each hour of service provided,
the entity has a right to invoice the customer in the amount that corresponds
directly with the value of the entity’s performance completed to date in
accordance with paragraph B16 of IFRS 15. Consequently, no disclosure
is necessary if the entity elects to apply the practical expedient in
paragraph 121(b) of IFRS 15.
Contract B
Cleaning services and lawn maintenance services are to be provided as
and when needed with a maximum of four visits per month over the next
two years. The customer pays a fixed price of CU400 per month for both
services. The entity measures its progress towards complete satisfaction
of the performance obligation using a time-based measure.
The entity discloses the amount of the transaction price that has not yet
been recognised as revenue in a table with quantitative time bands that
illustrates when the entity expects to recognise the amount as revenue.
The information for Contract B included in the overall disclosure is, as
follows:
20X8 20X9 Total
CU CU CU
Revenue expected to be recognised on
this contract as of 31 December 20X7 4,800(a) 2,400(b) 7,200
(a) CU4,800 = CU400 × 12 months.
(b) CU2,400 = CU400 × 6 months.
Extract from IFRS 15 (cont’d)
Contract C
Cleaning services are to be provided as and when needed over the next
two years. The customer pays fixed consideration of CU100 per month plus
a one-time variable consideration payment ranging from CU0–CU1,000
corresponding to a one-time regulatory review and certification of the
customer’s facility (ie a performance bonus). The entity estimates that it
will be entitled to CU750 of the variable consideration. On the basis of the
entity’s assessment of the factors in paragraph 57 of IFRS 15, the entity
includes its estimate of CU750 of variable consideration in the transaction
price because it is highly probable that a significant reversal in the amount
of cumulative revenue recognised will not occur. The entity measures its
progress towards complete satisfaction of the performance obligation using
a time-based measure.
The entity discloses the amount of the transaction price that has not yet
been recognised as revenue in a table with quantitative time bands that
illustrates when the entity expects to recognise the amount as revenue.
The entity also includes a qualitative discussion about any significant
variable consideration that is not included in the disclosure. The information
for Contract C included in the overall disclosure is as follows:
20X8 20X9 Total
CU CU CU
Revenue expected to be recognised on
this contract as of 31 December 20X7 1,575(a) 788(b) 2,363
(a) Transaction price = CU3,150 (CU100 × 24 months + CU750 variable consideration)
recognised evenly over 24 months at CU1,575 per year.
(b) CU1,575 ÷ 2 = CU788 (ie for 6 months of the year).
In addition, in accordance with paragraph 122 of IFRS 15, the entity

discloses qualitatively that part of the performance bonus has been excluded
from the disclosure because it was not included in the transaction price. That
part of the performance bonus was excluded from the transaction price in
accordance with the requirements for constraining estimates of variable
consideration.
The standard also provides an example of how an entity would make the
disclosure required by IFRS 15.120(b) using qualitative information (instead
of quantitatively, using time bands), as follows:

Example 43 — Disclosure of the transaction price allocated to the
remaining performance obligations—qualitative disclosure
(IFRS 15.IE220-IE221)
On 1 January 20X2, an entity enters into a contract with a customer to
construct a commercial building for fixed consideration of CU10 million.
The construction of the building is a single performance obligation that
the entity satisfies over time. As of 31 December 20X2, the entity has
recognised CU3.2 million of revenue. The entity estimates that construction
will be completed in 20X3, but it is possible that the project will be completed
in the first half of 20X4.
At 31 December 20X2, the entity discloses the amount of the transaction
price that has not yet been recognised as revenue in its disclosure of the
transaction price allocated to the remaining performance obligations.
The entity also discloses an explanation of when the entity expects to
recognise that amount as revenue. The explanation can be disclosed
either on a quantitative basis using time bands that are most appropriate
for the duration of the remaining performance obligation or by providing
a qualitative explanation. Because the entity is uncertain about the timing
of revenue recognition, the entity discloses this information qualitatively
as follows:
‘As of 31 December 20X2, the aggregate amount of the transaction
price allocated to the remaining performance obligation is CU6.8 million
and the entity will recognise this revenue as the building is completed,
which is expected to occur over the next 12–18 months.’
Bombardier Inc. used time bands to disclose information about remaining

performance obligations in its 2018 annual financial statements. In the example
below, it also explicitly disclosed that constrained variable consideration is
excluded from the amounts disclosed. This is a helpful reminder for users of
financial statements and it indicates amounts recognised in future periods may
be higher than those included in the table.
Practical example 4.3.2a: Bombardier Inc. (2018) Canada
Capita plc separately disclosed the transaction price allocated to remaining
performance obligations, with a period of more than two years and those with
a period of less than two years, within the segment note in its 2018 annual
financial statements. It then further disaggregated the contracts with remaining
performing obligations with a period more than two years into additional time
bands. In this context, Capita plc disaggregated its revenue by contract type
(i.e., contracts with an initial contract period of less than two years and those
with more than two years).
Practical example 4.3.2b: Capita plc (2018) United Kingdom
In contrast to the previous extract, SAP SE used a non-tabular approach when
disclosing information about remaining performance obligations. The following
practical example is from note 1 of its 2018 annual financial statements and
disclosed information about its remaining performance obligations to provide
“software support or cloud subscriptions and support”.
Practical example 4.3.2c: SAP SE (2018) Germany
4.4 Significant judgements
The standard specifically requires disclosure of significant accounting
estimates and judgements made in determining the transaction price,
allocating the transaction price to performance obligations and determining
when performance obligations are satisfied.28 These requirements are in
addition to the general requirements for significant judgements and accounting
estimates in IAS 1.29
The following chart provides an overview of the disclosure requirements in

IFRS 15 about significant judgements:
Significant judgement
disclosures
Timing of satisfaction Transaction price and

of PO allocation to PO
Over time Point in time Methods, inputs and

assumptions used for:
► Methods used ► Significant ► Determining the
to recognise judgements transaction price
revenue made in ► Assessing constraint
► Explanation evaluating when on variable
of why such the customer consideration
methods are a obtains control ► Allocating the
faithful depiction transaction price
of the transfer of ► Measuring obligations
goods or services for returns, refunds
and other similar
obligations
The requirements are explained in more detail in sections 4.4.1 and 4.4.2,
below. Also refer to section 10.5.2 in the general publication for further
discussion.
28
IFRS 15.123.
29
See IAS 1.122–133.
4.4.1 Determining the timing of satisfaction of performance obligations
IFRS 15 requires entities to provide disclosures about the significant
judgements made in determining the timing of satisfaction of performance
obligations. The disclosure requirements for performance obligations that
are satisfied over time differ from those satisfied at a point in time, but
the objective is similar: to disclose the judgements made in determining the
timing of revenue recognition. Entities must disclose the following information:

Qualitative For performance obligation satisfied over
time:
• The methods used to recognise IFRS 15.124(a)

revenue (for example, a description of
the output methods or input methods
used and how those methods are
applied)
• An explanation of why the methods IFRS 15.124(b)
used provide a faithful depiction of
the transfer of goods or services
For performance obligations satisfied at a IFRS 15.125
point in time, significant judgements made
in evaluating when a customer obtains
control of promised goods or services
In practical example 4.3e (in section 4.3 above), ASML Holding N.V. described
the methods used to recognise its revenue over time and explained the
relationship between the methods and the different types of services it
provides. Koninklijke Philips N.V. recognised revenue at a point in time in
relation its consumer type-products sales. Practical example 4.3.1d
(in section 4.3.1 above) provided a description of when control transfers to the
customer for these sales.
In practical example 4.4.1 below, SAP SE provided disclosure of the significant

judgement involved in determining the satisfaction of its performance
obligations. It explained how it determines whether its software offerings
provide customers with a right to use or a right to access its intellectual
property. It also described the judgement involved in identifying the appropriate
method to measure the progress of its performance obligations satisfied over
time.
Practical example 4.4.1: SAP SE (2018) Germany
Practical example 4.4.1: SAP SE (2018) (cont’d) Germany
4.4.2 Determining the transaction price and the amounts allocated to
performance obligations
Given the importance placed on revenue by financial statement users,
the standard requires entities to disclose qualitative information about the
methods, inputs and assumptions used in their annual financial statements
to determine the transaction price and allocate it, as follows:

Qualitative Information about methods, inputs and
assumptions used for the following:
• Determining the transaction price, IFRS 15.126(a)
which includes, but is not limited to:
• Estimating variable consideration
• Considering the effects of time

value of money
• Measuring fair value of non-cash

consideration
• Assessing whether an estimate of IFRS 15.126(b)

variable consideration is constrained
• Allocating the transaction price, IFRS 15.126(c)
including:
• Estimating stand-alone selling
prices of promised goods or
services
• Allocating discounts to a specific

part of the contract (if applicable)
• Allocating variable consideration to

a specific part of the contract (if
applicable)
• Measuring obligations for returns, IFRS 15.126(d)

refunds and other similar obligations
How we see it
Disclosing information about the methods, inputs and assumptions they
use to determine and allocate the transaction price was a change in practice
for some entities. Entities with diverse contracts need to make sure they
have the processes and procedures in place to capture all of the different
methods, inputs and assumptions used in determining the transaction price
and allocating it to performance obligations.
Since fee arrangements often include contingencies (e.g., No Win-No-Fee
arrangements), Slater and Gordon Limited estimated variable consideration
when determining the transaction price as presented in practical example 4.4.2.
Therefore, it disclosed information about the method (i.e., most likely amount
approach), inputs and assumptions (i.e., management’s assessment and the
probability of success of each case) in its 2018 annual financial statements.
Furthermore, Slater and Gordon Limited disclosed information about the
assessment of whether a significant financing component exists. The entity
concluded that contracts generally comprise only one performance obligation.
As such, Slater and Gordon Limited did not disclose information about the
allocation of the transaction price.
Practical example 4.4.2: Slater and Gordon Limited (2018) Australia
In practical example 4.3.1d (in section 4.3.1 above), Koninklijke Philips N.V.
explains the need to estimate variable consideration in relation to returns.
contract
IFRS 15 requires entities to disclose information about the assets recognised to
help users understand the types of costs recognised as assets, and how those
assets are subsequently amortised or impaired. Refer to section 10.5.3 of the
general publication for further discussion. The disclosure requirements are, as
follows:

Qualitative • Description of the judgements made in IFRS 15.127(a)
determining the amount of the costs
incurred to obtain or fulfil a contract
with a customer
• The method it uses to determine the IFRS 15.127(b)
amortisation for each reporting period
Quantitative • The closing balances of assets IFRS 15.128(a)
recognised from the costs incurred
to obtain or fulfil a contract with a
customer, by main category of asset
(for example, costs to obtain contracts
with customers, pre-contract costs and
setup costs)
• The amount of amortisation recognised IFRS 15.128(b)
in the reporting period
• The amount of any impairment losses IFRS 15.128(b)
recognised in the reporting period
In the following practical example, Capita plc disclosed its accounting policy on
assets recognised from costs to fulfil and costs to obtain a contract in note 2
on “Summary of significant accounting policies” in its 2018 annual financial
statements. This is followed by a description of how it determined the
amortisation period and assessed the assets for impairment. In note 17, Capita
plc provided quantitative disclosures of “contract fulfilment assets”, separately
disclosing the closing balance, the amount that was utilised (i.e., amortisation
expense) and the amount of impairment losses for each reporting period.
Practical example 4.5: Capita plc (2018) United Kingdom
Practical example 4.5: Capita plc (2018) (cont’d) United Kingdom
4.6 Practical expedients
The standard allows entities to use several practical expedients and requires
them to disclose their use of the following two practical expedients (refer to
section 10.5.4 of the general publication for further discussion):

Qualitative • The fact that an entity elects IFRS 15.129
to use one of the practical
expedients about:
• The existence of
a significant financing
component (IFRS 15.63)
• Incremental costs of
obtaining a contract
(IFRS 15.94)
In addition, entities are required to disclose the use of the disclosure practical
expedient in IFRS 15.121 (which permits an entity not to disclose information
about remaining performance obligations if one of the conditions in the
paragraph are met, see section 4.3.2 above). IFRS 15 provides other practical
expedients. While not explicitly required, entities need to consider whether to
disclose that they used them.
In practical example 4.2a (in section 4.2 above), Deutsche Telekom

Aktiengesellschaft disclosed that it elected to use the practical expedient
“not to recognise a significant financing component if the period between
when a good or service is transferred to the customer and when the customer
pays for that good or service will be one year or less”. Koninklijke Philips N.V.
disclosed its application of IFRS 15.94 relating to incremental costs of obtaining
a contract in practical example 4.3.1d (in section 4.3.1 above).
In practical example 4.2c (in section 4.2 above), ProSiebenSat.1 Media SE

disclosed that it elected to use the practical expedient in IFRS 15.121(a) in
relation to the remaining performance obligation disclosure requirement. ASML
Holding N.V. disclosed that it uses the ‘right to invoice’ practical expedient in
IFRS 15.B16 for its performance obligations relating to “Service contracts” and
“OnPulse maintenance” in practical example 4.3.1e (in section 4.3.1e above).
5. Disclosures in interim financial statements
IAS 34 Interim Financial Reporting requires disclosure of disaggregated revenue
information, consistent with the requirement included in IFRS 15 for annual
financial statements.30 See section 4.1 for further discussion on this disclosure
requirement.
Although none of the other annual IFRS 15 disclosure requirements apply to

condensed interim financial statements, entities will need to comply with the
general requirements in IAS 34. For example, IAS 34.15 requires an entity to
include in its interim financial report, sufficient information to explain events
and transactions that are significant to an understanding of the changes
in the entity’s financial position and performance since the end of the last
annual reporting period. Information disclosed in relation to those events
and transactions must update the relevant information presented in the most
recent annual financial report. IAS 34.15B includes a non-exhaustive list of
events and transactions for which disclosure would be required if they are
significant, and which includes recognition of impairment losses on assets
arising from contracts with customers, or reversals of such impairment losses.
30
IAS 34.16A(l).
Appendix A: Extract from EY’s IFRS Disclosure Checklist
Disclosure made
Yes No N/A
IFRS 15 Revenue from Contracts with Customers
IFRS 15 Revenue from Contracts with Customers applies with limited exceptions, to all
contracts with customers.
First-time adopters applying IFRS 15

IFRS 1.D34
If an entity applies the transition provisions in IFRS 15.C5, does it make the disclosures
IFRS 15.C6
required by IFRS 15.C6.
IFRS 1.D34-35
In IFRS 15.C5, the date of initial application should be interpreted as the beginning of the
first IFRS reporting period.
Presentation
IFRS 15.105
Does the entity present any unconditional rights to consideration separately from contract
assets as a receivable
IFRS 15.108
A receivable is an entity’s right to consideration that is unconditional. A right to
consideration is unconditional if only the passage of time is required before payment of that
consideration is due. For example, an entity would recognise a receivable if it has a present
right to payment even though that amount may be subject to refund in the future. An entity
must account for a receivable in accordance with IFRS 9.
IFRS 15.108
Upon initial recognition of a receivable from a contract with a customer, does the entity
present any difference between the measurement of the receivable in accordance with
IFRS 9, as applicable, and the corresponding amount of revenue as an expense (for example,
as an impairment loss)
IFRS 15.107
If the entity performs by transferring goods or services to a customer before the customer
pays consideration or before payment is due, does the entity present the contract as a
contract asset, excluding any amounts presented as a receivable
IFRS 15.107
A contract asset is an entity’s right to consideration in exchange for goods or services that
the entity has transferred to a customer. An entity must assess a contract asset for
impairment in accordance with IFRS 9. An impairment of a contract asset shall be measured,
presented and disclosed on the same basis as a financial asset that is within the scope of
IFRS 9 (see also IFRS15.113(b)).
IFRS 15.106
If a customer pays consideration, or the entity has a right to an amount of consideration that
is unconditional (i.e., a receivable), before the entity transfers a good or service to the
customer, does the entity present the contract as a contract liability when the payment is
made or the payment is due (whichever is earlier)
IFRS 15.106
A contract liability is an entity’s obligation to transfer goods or services to a customer for
which the entity has received consideration (or an amount of consideration is due) from the
customer.
IFRS 15.109
If the entity uses an alternative description for a contract asset, does the entity provide
sufficient information for a user of the financial statements to distinguish between
receivables and contract assets
IFRS 15.109
IFRS 15 uses the terms ‘contract asset’ and ‘contract liability’ but does not prohibit an entity
from using alternative descriptions in the statement of financial position for those items.
The existence of a significant financing component in the contract
IFRS 15.65
Does the entity present the effects of financing (interest revenue or interest expense)
separately from revenue from contracts with customers in the statement of comprehensive
income
IFRS 15.65
Interest revenue or interest expense is recognised only to the extent that a contract asset
(or receivable) or a contract liability is recognised in accounting for a contract with a
customer.
Disclosure made
Yes No N/A
Sale with a right of return
IFRS 15.B25
Does the entity present the asset for an entity’s right to recover products from a customer
on settling a refund liability separately from the refund liability
IFRS 15.B25
An asset recognised for an entity’s right to recover products from a customer on settling a
refund liability shall initially be measured by reference to the former carrying amount of the
product (for example, inventory) less any expected costs to recover those products
(including potential decreases in the value to the entity of returned products). At the end of
each reporting period, an entity must update the measurement of the asset arising from
changes in expectations about products to be returned.
Disclosures
IFRS 15.110
The objective of the disclosure requirements in IFRS 15 is for an entity to disclose sufficient
information to enable users of financial statements to understand the nature, amount,
timing and uncertainty of revenue and cash flows arising from contracts with customers.
An entity must consider the level of detail necessary to satisfy the disclosure objective and
IFRS 15.111
how much emphasis to place on each of the various requirements. An entity must aggregate
or disaggregate disclosures so that useful information is not obscured by either the inclusion
of a large amount of insignificant detail or the aggregation of items that have substantially
different characteristics.
IFRS 15.112 An entity need not disclose information in accordance with IFRS 15 if it has provided the
information in accordance with another standard.
IFRS 15.110
To achieve the disclosure objective stated in IFRS 15.110, does the entity disclose
qualitative and quantitative information about all of the following:
a. Its contracts with customers (see IFRS 15.113-122)
b. The significant judgements, and changes in the judgements, made in applying IFRS 15 to
those contracts (see IFRS 15.123-126)
c. Any assets recognised from the costs to obtain or fulfil a contract with a customer in
accordance with IFRS 15.91 or IFRS 15.95 (see IFRS15.127-128)
Contracts with customers
IFRS 15.113
Does the entity disclose all of the following amounts for the reporting period unless those
amounts are presented separately in the statement of comprehensive income in accordance
with other standards:
a. Revenue recognised from contracts with customers, which the entity must disclose
separately from its other sources of revenue
b. Any impairment losses recognised (in accordance with IFRS 9, as applicable) on any
receivables or contract assets arising from the entity’s contracts with customers, which
the entity must disclose separately from impairment losses from other contracts
Disaggregation of revenue
IFRS 15.114
Does the entity disaggregate revenue recognised from contracts with customers into
categories that depict how the nature, amount, timing and uncertainty of revenue and cash
flows are affected by economic factors
IFRS 15.B87
IFRS 15.114 requires an entity to disaggregate revenue from contracts with customers into
categories that depict how the nature, amount, timing and uncertainty of revenue and cash
flows are affected by economic factors. Consequently, the extent to which an entity’s
revenue is disaggregated for the purposes of this disclosure depends on the facts and
circumstances that pertain to the entity’s contracts with customers. Some entities may need
to use more than one type of category to meet the objective in IFRS 15.114 for
disaggregating revenue. Other entities may meet the objective by using only one type of
category to disaggregate revenue.
IFRS 15.B88
When selecting the type of category (or categories) to use to disaggregate revenue, an
entity must consider how information about the entity’s revenue has been presented for
other purposes, including all of the following:
a. Disclosures presented outside the financial statements (for example, in earnings releases,
annual reports or investor presentations)
b. Information regularly reviewed by the chief operating decision maker for evaluating the
financial performance of operating segments
c. Other information that is similar to the types of information identified in IFRS 15.B88(a)
and (b) and that is used by the entity or users of the entity’s financial statements to
evaluate the entity’s financial performance or make resource allocation decisions
IFRS 15.B89
Examples of categories that might be appropriate include, but are not limited to, all of the
following:
► Type of good or service (for example, major product lines)
► Geographical region (for example, country or region)
► Market or type of customer (for example, government and non-government customers)
► Type of contract (for example, fixed-price and time-and-materials contracts)
Disclosure made
Yes No N/A
► Contract duration (for example, short-term and long-term contracts)
► Timing of transfer of goods or services (for example, revenue from goods or services
transferred to customers at a point in time and revenue from goods or services
transferred over time)
► Sales channels (for example, goods sold directly to consumers and goods sold through
intermediaries)
IFRS 15.115
If the entity applies IFRS 8 Operating Segments, does the entity disclose sufficient
information to enable users of financial statements to understand the relationship between
the disclosure of disaggregated revenue (in accordance with IFRS 15.114) and revenue
information that is disclosed for each reportable segment
Contract balances
IFRS 15.116
Does the entity disclose all of the following:
a. The opening and closing balances of receivables, contract assets and contract liabilities
from contracts with customers, if not otherwise separately presented or disclosed
b. Revenue recognised in the reporting period that was included in the contract liability
balance at the beginning of the period
c. Revenue recognised in the reporting period from performance obligations satisfied (or
partially satisfied) in previous periods (for example, changes in transaction price)
IFRS 15.117
Does the entity explain how the timing of satisfaction of its performance obligations (see
IFRS 15.119
IFRS 15.119(a)) relates to the typical timing of payment (see IFRS 15.119(b)) and the effect
that those factors have on the contract asset and contract liability balances; the explanation
provided may use qualitative information
IFRS 15.118
Does the entity provide an explanation (with both qualitative and quantitative information) of
the significant changes in the contract asset and the contract liability balances during the
reporting period
IFRS 15.118
Examples of changes in the entity’s balances of contract assets and contract liabilities
include any of the following:
a. Changes due to business combinations
b. Cumulative catch-up adjustments to revenue that affect the corresponding contract asset or
contract liability, including adjustments arising from a change in the measure of progress, a
change in an estimate of the transaction price (including any changes in the assessment of
whether an estimate of variable consideration is constrained) or a contract modification
c. Impairment of a contract asset
d. A change in the time frame for a right to consideration to become unconditional (i.e., for a
contract asset to be reclassified to a receivable)
e. A change in the time frame for a performance obligation to be satisfied (i.e., for the
recognition of revenue arising from a contract liability)
Performance obligations
IFRS 15.119
Does the entity disclose information about its performance obligations in contracts with
customers, including a description of all of the following:
a. When the entity typically satisfies its performance obligations (for example, upon
shipment, upon delivery, as services are rendered or upon completion of service),
including when performance obligations are satisfied in a bill-and-hold arrangement
b. The significant payment terms
IFRS 15.119
For example, when payment is typically due, whether the contract has a significant financing
component, whether the consideration amount is variable and whether the estimate of
variable consideration is typically constrained in accordance with IFRS 15.56–58.
c. The nature of the goods or services that the entity has promised to transfer, highlighting
any performance obligations to arrange for another party to transfer goods or services
(i.e., if the entity is acting as an agent)
d. Obligations for returns, refunds and other similar obligations
e. Types of warranties and related obligations
Transaction price allocated to the remaining performance obligations
IFRS 15.120
Does the entity disclose all of the following information about its remaining performance
obligations:
a. The aggregate amount of the transaction price allocated to the performance obligations
that are unsatisfied (or partially unsatisfied) as of the end of the reporting period
b. An explanation of when the entity expects to recognise as revenue the amount disclosed
in accordance with IFRS 15.120(a), which the entity discloses in either of the following
ways:
► On a quantitative basis using the time bands that would be most appropriate for the
duration of the remaining performance obligations
Disclosure made
Yes No N/A
► By using qualitative information
IFRS 15.121
As a practical expedient, an entity need not disclose the information in IFRS 15.120 for a
performance obligation if either of the following conditions is met:
a. The performance obligation is part of a contract that has an original expected duration of
one year or less.
IFRS 15.B16
b. The entity recognises revenue from the satisfaction of the performance obligation in
accordance with IFRS 15.B16.
That is, if an entity has a right to consideration from a customer in an amount that
corresponds directly with the value to the customer of the entity’s performance completed
to date (for example, a service contract in which an entity bills a fixed amount for each hour
of service provided), as a practical expedient, the entity may recognise revenue in the
amount to which the entity has a right to invoice.
IFRS 15.122
Does the entity explain qualitatively whether it is applying the practical expedient in
IFRS 15.121 and whether any consideration from contracts with customers is not included in
the transaction price and, therefore, not included in the information disclosed in accordance
with IFRS 15.120
Significant judgements in the application of IFRS 15
IFRS 15.123
Does the entity disclose the judgements, and changes in the judgements, made in applying
IFRS 15 that significantly affect the determination of the amount and timing of revenue from
contracts with customers. In particular, does the entity explain the judgements, and changes
in the judgements, used in determining both of the following:
a. The timing of satisfaction of performance obligations (see IFRS 15.124-125)
b. The transaction price and the amounts allocated to performance obligations (see
IFRS 15.126)
Determining the timing of satisfaction of performance obligations
IFRS 15.124
For performance obligations that the entity satisfies over time, does the entity disclose both
of the following:
a. The methods used to recognise revenue (for example, a description of the output methods
or input methods used and how those methods are applied)
b. An explanation of why the methods used provide a faithful depiction of the transfer of
goods or services
IFRS 15.125
For performance obligations satisfied at a point in time, does the entity disclose the
significant judgements made in evaluating when a customer obtains control of promised
goods or services
Determining the transaction price and the amounts allocated to performance
obligations
IFRS 15.126
Does the entity disclose information about the methods, inputs and assumptions used for all
of the following:
a. Determining the transaction price, which includes, but is not limited to, estimating variable
consideration, adjusting the consideration for the effects of the time value of money and
measuring non-cash consideration
b. Assessing whether an estimate of variable consideration is constrained
c. Allocating the transaction price, including:
► Estimating stand-alone selling prices of promised goods or services
► Allocating discounts to a specific part of the contract (if applicable)
► Allocating variable consideration to a specific part of the contract (if applicable)
d. Measuring obligations for returns, refunds and other similar obligations
Assets recognised from the costs to obtain or fulfil a contract with a
customer
IFRS 15.127
Does the entity describe both of the following:
a. The judgements made in determining the amount of the costs incurred to obtain or fulfil a
contract with a customer
b. The method it uses to determine the amortisation for each reporting period
IFRS 15.128
Does the entity disclose all of the following:
a. The closing balances of assets recognised from the costs incurred to obtain or fulfil a
contract with a customer (in accordance with IFRS 15.91 or IFRS 15.95), by main
category of asset (for example, costs to obtain contracts with customers, pre-contract
costs and setup costs)
b. The amount of amortisation recognised in the reporting period
c. The amount of any impairment losses recognised in the reporting period
Disclosure made
Yes No N/A
Practical expedients
IFRS 15.129
If the entity elects to use the practical expedient in IFRS15.63 regarding the existence of a
significant financing component, does the entity disclose that fact
IFRS 15.63
As a practical expedient, an entity need not adjust the promised amount of consideration for
the effects of a significant financing component if the entity expects, at contract inception,
that the period between when the entity transfers a promised good or service to a customer
and when the customer pays for that good or service will be one year or less.
IFRS 15.129
If the entity elects to use the practical expedient in IFRS15.94 regarding the incremental
costs of obtaining a contract, does the entity disclose that fact
IFRS 15.94
As a practical expedient, an entity may recognise the incremental costs of obtaining a
contract as an expense when incurred if the amortisation period of the asset that the entity
otherwise would have recognised is one year or less.
Statement of profit or loss and other comprehensive income

IAS 1.32
Unless required or permitted by another IFRS, does the entity present separately, and not
offset, income and expenses
IAS 1.34
Examples of items that are or may be offset in the statement of comprehensive income
include the following:
a. Gains and losses on the disposal of non-current assets, including investments and
operating assets, are reported by deducting from the amount of consideration on disposal
the carrying amount of the asset and related selling expenses
b. Expenditure related to a provision that is recognised in accordance with IAS 37 Provisions,
Contingent Liabilities and Contingent Assets and reimbursed under a contractual
arrangement with a third party (for example, a supplier’s warranty agreement) may be
netted against the related reimbursement.
IAS 1.35 c. Gains and losses arising from a group of similar transactions are reported on a net basis,
for example, foreign exchange gains and losses or gains and losses arising on financial
instruments held for trading. However, an entity presents such gains and losses
separately if they are material.
Condensed interim reporting

Explanatory notes
IAS 34.16A
Does the entity disclose the following information in the notes to its interim financial
statements or elsewhere in the interim financial report (the information is normally reported
on a financial year-to-date basis):
The following disclosures shall be given either in the interim financial statements or
incorporated by cross-reference from the interim financial statements to some other
statement (such as management commentary or risk report) that is available to users of the
financial statements on the same terms as the interim financial statements and at the same
time. If users of the financial statements do not have access to the information incorporated
by cross-reference on the same terms and at the same time, the interim financial report is
incomplete.
…
l. The disaggregation of revenue from contracts with customers required by IFRS 15.114-
115
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Applying IFRS

1. Introduction and disclosure objective 3

• IFRS 15 applies to revenue from contracts with customers. It became

• The standard requires detailed disclosures to aid users in understanding

This publication provides a summary of the presentation and disclosure

Extracts from financial statements presented in this publication are reproduced

IFRS 15 requirements Legacy disclosures Changes

Not all of the presentation and disclosure requirements relevant to contracts

Refer to section 4.1 of this publication for discussion on the requirement to

Practical example 3.1a: Slater and Gordon Limited (2018) Australia

Practical example 3.1b: The Village Building Co. Limited

Practical example 3.1c: Ferrovial, S.A. (2018) Spain

Practical example 3.1d: UBS Group AG (2018) Switzerland

Unless required, or permitted, by another standard, IAS 1 does not permit

When applying the requirements for determining the transaction price in

3.2 Contract balances

• Contract asset: An entity’s right to consideration in exchange for goods

Practical example 3.2a: Bombardier Inc. (2018) Canada

The standard allows an entity to use alternative descriptions in the statement

In its 2018 annual financial statements, Fédération Internationale de Football

Practical example 3.2.1: Fédération Internationale de

If an entity is required by IFRS 15 to combine contracts with the same customer

• A separate class of asset (similar in nature to work in progress, or

Whether costs to fulfil a contract meet the criteria for capitalisation in

Capitalised contract costs are subject to an impairment assessment at the end

Practical example 3.3: Capita plc (2018) United Kingdom

Refer to section 5.4 of the general publication for further discussion.

Salvatore Ferragamo presented refund liabilities and right of return assets

Practical example 3.4: Salvatore Ferragamo S.p.A. (2018) Italy

In its 2018 annual financial statements, Bombardier Inc. presented the

Practical example 3.5a: Bombardier Inc. (2018) Canada

Bombardier Inc. provided disclosure of impairment losses recognised on its

Practical example 3.5b: Bombardier Inc. (2018) Canada

Disclosure requirements IFRS 15

We believe that, when determining categories for disaggregation of revenue,

IFRS 15 provides the following example to illustrate how an entity might

Extract from IFRS 15

Major goods/service lines

Timing of revenue recognition

Since entities are encouraged to tailor their disclosure of disaggregated

The segment revenue disclosures provided in accordance with IFRS 8 might be

SNCF Mobilités disclosed disaggregated revenue by main types of services

Practical example 4.1b: SNCF Mobilités (2018) France

Practical example 4.1c: Slater and Gordon Limited (2017) Australia

In its 2018 financial statements, FIFA split its disclosure of disaggregated

As discussed above, to help determine the appropriate level of revenue

Disclosure requirements IFRS 15

• Cumulative catch-up adjustments

• A change in the time frame for

Illustration 4.2 — Contract asset and liability disclosures

20X9 20X8 20X7

Contract asset CU1,500 CU2,250 CU1,800

Revenue recognised in the period from:

Practical example 4.2a: Deutsche Telekom

Practical example 4.2b: Airbus SE (2018) Netherlands

Practical example 4.2c: ProSiebenSat.1 Media SE (2018) Germany

Practical example 4.2d: ASML Holding N.V. (2018) Netherlands

Disclosure requirements IFRS 15

• Significant payment terms (for IFRS 15.119(b)